In shadow of US tariff, India back to table for trade talks with UK, EU

By | February 25, 2025

As US President Donald Trump moves to upend the world trade order with tariff threats against allies and rivals alike, New Delhi Monday re-started negotiations for two long-stalled, big-ticket trade deals with Britain’s new Labour Party-led administration — just days ahead of President of the European Commission Ursula von der Leyen’s visit to India for trade talks.

After an eight-month pause due to general elections in India, the UK and European parliamentary elections, New Delhi and London announced plans to restart trade talks for a free trade agreement (FTA), a bilateral investment treaty, and a separate social security pact during UK Trade Secretary Jonathan Reynolds’s visit that began Monday.

India Resumes Trade Talks with UK & EU Amid US Tariff Pressure

As US trade policies create uncertainty in global markets, India has resumed long-stalled trade negotiations with the United Kingdom (UK) and the European Union (EU). These discussions, which were halted due to elections in India, the UK, and the EU, are now back on track as India seeks to strengthen trade ties and reduce dependency on the US market.

India-UK Trade Talks Resume

During UK Trade Secretary Jonathan Reynolds’s visit to India, both nations agreed to restart talks on:

  • A Free Trade Agreement (FTA) to lower trade barriers and tariffs.
  • A Bilateral Investment Treaty (BIT) to boost investor confidence.
  • A Social Security Agreement to benefit professionals working in both countries.

The India-UK trade deal is expected to enhance market access, support technology and manufacturing, and increase investments. Both governments aim to resolve trade barriers, particularly in pharmaceuticals, financial services, and mobility of skilled workers.

India-EU Trade Discussions Restart

India is also preparing to restart negotiations with the European Union (EU) ahead of European Commission President Ursula von der Leyen’s visit. The India-EU trade deal has been stalled due to differences over:

  • Market access and tariff reductions.
  • Intellectual property rights and regulatory standards.
  • Sustainability and digital trade policies.

The EU is one of India’s largest trading partners, and a finalized FTA would boost exports in textiles, IT, and automobiles, while strengthening economic cooperation.

Why India is Prioritizing These Trade Deals

With the US imposing new tariffs and adopting a protectionist trade stance, India is strategically diversifying its trade partnerships to ensure stability in exports and investments.

Conclusion

The revival of India’s FTA talks with the UK and EU signals a shift towards stronger global trade partnerships. These agreements could significantly boost India’s economy, create jobs, and enhance global trade opportunities.